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Willich company, Wells Fargo sue each other

5/9/05--Bob Mack/Staff - This is a profile of MDI (Medical Development International), a Ponte Vedra Beach based company for the In Front section of the First Business tab. The nearly $100 million company provides medical services to about 200,000 federal inmates nationwide. Richard Willich, is the President and CEO of the company. (FLORIDA TIMES-UNION/Bob Mack)

Bank claims Willich spent $30 million on himself, not his medical services company

A Ponte Vedra Beach company that provides medical services to prisons is in a legal battle with one of the nation’s largest banks, and up to $30 million could be at stake.

MDI Holdings and Wells Fargo have filed suit against each other in the past week.

Both entities seek millions of dollars in a dispute that also has drawn scrutiny from three North Carolina congressmen.

The Florida firm’s complaint came Wednesday in St. Johns County. MDI claims the bank overstepped its boundaries and tried to run its business. Wells Fargo put a management group in charge of restructuring the company, the lawsuit says. That firm made sure Wells Fargo, but no one else, got paid.

MDI wants $15 million in damages.

Wells Fargo’s filing on Friday in Delaware seeks repayment of up to $30 million it loaned to MDI. The financial institution — which got the company’s business through a merger with Wachovia Bank — claims MDI owner Richard Willich spent money on himself, not his work.

Willich used loans to buy a 2010 Tesla Roadster, a high-end electric vehicle, according to court documents. Wells Fargo also claims Willich loaned himself $4.9 million for his farm and more than $300,000 for a biography and screenplay about his life.

A security worker at the front desk of MDI’s headquarters in the Nocatee community was told that no one would comment on behalf of the company. A vehicle cover featuring a Tesla emblem protected a car with a sporty body style in MDI’s gated parking lot.

A point both sides agree on — and that prompted an investigatory letter from the trio of representatives — is MDI’s contract with the federal Bureau of Prisons for the Butner Federal Correctional Complex near Durham, N.C.

Through the agreement, the bureau pays MDI for medical coverage it coordinates for Butner inmates. MDI then is supposed to pay providers for the care.

“Although the amount of Duke’s claim against MDI is contested, a significant part of it is past due and unpaid,” MDI’s lawsuit says.

A February letter from U.S. Reps. David Price and Melvin Watt, both Democrats, and Howard Coble, a Republican, all from North Carolina, to the Bureau of Prisons says the federal agency knows about the problem but hasn’t addressed it.

“We believe [the bureau’s] decision to ignore underlying problems of this magnitude defies common sense and is not in keeping with appropriate federal contract management and oversight practices designed to guard against waste, fraud, and abuse and contain costs,” the letter says.

Wells Fargo claims MDI’s assets at the end of 2011 totaled about $55.4 million. Its liabilities were $74.9 million, the bank said.

MDI relocated to Northeast Florida from Virginia in 2003. In 2010, it employed about 200 people. Willich founded MDI in 1992 as a scheduling and medical claims adjusting company. Over the years, it used technology such as animation and 3-D graphics to alter the way health care information is used and disseminated.